Financial challenges for physician practices: it’s not getting any easier
At least not according to a 2014 survey conducted by Medical Economics.
Of the practices surveyed, 45% responded that they were performing at a level about the same as in 2013, while 39% stated that they are worse off than a year ago. That’s a whopping 84% of practices that are apparently surviving-not-thriving.
In the meantime, it seems from the study, expenses are rising faster than revenues. The study cites as a causal example the expenses of preparing for ICD-10, which can “cost even a solo practice upwards of $56,000.”
This supports what we conveyed in a previous blog, Business office expenditures are on the rise, where we shared a quote by Amanda Hopkins Tirrell, COO at Georgia Regents Medical Associates. Among other ICD-10-related expenditures, she says, migration to the new coding system is “forcing hospitals and physician practices to hire certified coders with a higher level of education, and this level of expertise is more expensive.”
“Additionally,” she continues, “the provider relationships with health insurance companies have become more complex and rigorous, and it often takes a cadre of new, specially trained experts to manage those payor relationships.”
It probably comes as no surprise that, according to the Medical Economics survey, densely populated areas “are experiencing falling insurer reimbursement rates and narrowing networks” at a higher rate than less populated areas, with physicians who are expelled from payer networks standing to lose significant portions of income all at once.
As renowned healthcare practice management expert, Elizabeth Woodcock says in the Medical Economics article, “healthcare reimbursement is driven primarily at the local level based on provider saturation and payer consolidation, so large disparities often exist between individual markets. For example, you can travel an hour outside of Atlanta and see reimbursement rates that are 30% higher.”
“It’s supply and demand, and it speaks to the dominance of the payers and market dynamics” she continues. “When you have that sort of monopoly, especially in so many markets, physicians hands are being tied behind their backs like never before.”
This is all further proof of what you likely already know: it’s getting tougher out there for many providers. One consideration might be to outsource business office functions to an experienced revenue cycle management firm. Perhaps we can help; if so, let us know. In the meantime, here’s a special free offer for you. Click below!